Interfusion eyes hosted services revenue
Irish network integrator, Interfusion Networks has launched a new managed, hosted VPN (virtual private network) service as part of a drive to dramatically increase its margins from managed services.
The service, called NetHop, provides users with transparent network or Internet connectivity and supports a wide variety of commercially available access technologies, including DSL, ISDN, leased line, frame relay and GPRS. It is a fully managed service aimed at organisations with multiple locations such as franchises, dealerships or retail outlets as well as mobile or home-based staff.
The company claims reductions in telecommunications costs up to 75 per cent through the service, which it bases on a comparison with standard Eircom ISDN connectivity.
The new service represents a further move for the company towards securing renewable contracts for managed services, while its competitors continue to focus on revenue from product sales, according to managing director Derek Daly. The company managed to return a small profit in 2002, but he projects a 45-50 per cent rise in turnover by the end of 2003. By 2005, turnover from services could reach the EUR5m mark, he said.
Interfusion Networks was established in 2000 to support what was then an explosion in the number of data centres and co-location services by providing TCP/IP integration services. It planned to work heavily with resellers.
‘We got a lot of work at the time from standard Compaq resellers who had dabbled in networks, but had a backlog of projects that they couldn’t deliver because they didn’t have the skills,’ said Daly.
However, the fast fizzling out of the data centre boom dictated a change in strategy.
‘We survived, really, for six months on the backlog of friends and contacts in the industry who had projects that were not getting done, but after six months it became quite obvious that we needed to change our business model and look differently at the market.’
It was decided that a more direct channel to market was required, although Daly says they still work closely with its resellers. From mid-2001, the firm provided TCP/IP consultancy, security and support services and early in 2002, began to offer managed services.
In terms of the reseller channel, Daly says that many of their partners are branching out to very focused applications, such as e-POS (point-of-sale) solutions, and the company is working closely with them.
‘The application guys are struggling to sell their applications because there is the cost of setting up infrastructure, so it makes sense to get together with these guys,’ he said.
Given that a dial-up Eircom network can be prohibitively costly, the solution is to build a VPN infrastructure, and manage and run it for the customer. ‘Basically we are giving them the same as a leased line by taking DSL, ISDN, GPRS or any other access infrastructure, and we produce an IP layer, and build as a cost-effective infrastructure.’
The NetHop service incorporates enhanced security using IP Security Protocol encryption standard and MPLS (Multi Protocol Label Switching) technologies, with data security and privacy in a wired and wireless environment. ‘Security must be designed as an inherent part of the network,’ said Daly.
The NetHop service, like most of the other services provided by Interfusion, is aimed squarely at medium-sized firms. Daly sees a gap in managed services provision for companies that are medium-sized, certainly compared to large firms, who are well catered for by tier one providers. Interfusion is a private, entirely self-funded company.